How Canada’s commercial coverage rates fared in Q1 2026

Data are starting to support broker and insurer anecdotes about softening commercial insurance lines in Canada.

Marsh’s global insurance market index (GIMI) report, a proprietary measure of commercial insurance rate changes at renewal, finds insurance rates in Canada declined 6% during Q1 2026, compared to a 7% decline in Q4 2025.

Property

Looking at individual sectors, Marsh’s report says property insurance rates slipped 6% during 2026’s first quarter and that competition levels are high. By contrast, rates fell 8% in the final quarter of 2025.

Marsh adds surplus capacity and strong insurer appetite in the property market led to rising levels of competition. “Most quota-share placements were over-subscribed, contributing to greater concurrency of key deductibles and sub-limits,” the report adds.

Further, reinsurance renewals for Jan. 1, 2026 generally displayed expanded capacity and insured losses that were well below the five-year average.

Insurers also relaxed policy conditions in order to secure business, “broadening terms to offset downward rate pressure,” Marsh notes.

Access to facilities helped clients seeking to improve their terms and/or costs. And the report says some clients redeployed premium savings into purchases of additional limits or lower retentions – “drawing on excess capacity and facility access to improve program structure and reduce cost.”

Casualty

Overall casualty insurance rates in Canada decreased 5% in 1Q 2026, matching the decline in 4Q 2025 and marking the 11th consecutive quarter of declines.

“Clients with Canada-specific exposures seen as good risks by insurers typically benefitted from expanded capacity and price competition,” the report says. But it adds risks exposed to the U.S. and other complex risks did see selective rate increases – some of which were double-digits.

For example, U.S. auto liability underwriting tightened, with higher attachments, shared loss structures, and telematics requirements for clients with those exposures.

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“Specialty capacity remained selective, especially for US-exposed and loss-impacted risks,” Marsh adds.

Meanwhile, reinsurers emphasized limit management, higher attachments and reduced line sizes for accumulation risks. Scrutiny around underwriting also increased, “with a focus on higher attachments, sublimits, and/or per- and polyfluoroalkyl substances (PFAS) and pollution wordings.”

“Underwriters scrutinized PFAS and wildfire risks, at times using exclusions, sublimits, and mitigation-linked pricing,” the report says.

Depending on the specific risk, some clients emphasized fleet safety, telematics data use, and wildfire mitigation to improve terms and renewability, Marsh says. And, much like property clients, casualty clients also deployed premium savings into “additional casualty tower capacity.”

Professional lines

Rates for financial and professional lines in Canada declined 6% in 1Q 2026, slightly ahead of a 5% slip in 4Q 2025.

Marsh’s index notes rates for directors and officers liability coverage experienced a low single-digit decrease. And while rate reductions continued in some program layers, the report says insurers generally resisted further decreases.

“Rising fiduciary litigation tied to health and welfare plans is being watched, though without material impacts to underwriting or rates to date,” Marsh’s report says. And, “employment practices liability rates and exposures remained stable.”

Cyber

Rates for cyber insurance decreased 5% in 1Q 2026 in Marsh’s index. Capacity among insurers “expanded across excess and primary layers, including from new market entrants, increasing competition,” the report adds.

What’s more, there was continued coverage expansion and fewer coinsurance requirements and broader sub-limited enhancements.

“Organizations with strong cyber controls were well-positioned to negotiate lower retentions, broaden coverage, and capture excess-layer savings,” the report says.

Phil Porado

Phil, an award-winning journalist with over 30 years of experience in financial topics, has been managing editor of Canadian Underwriter for more than three years.